WASHINGTON, D.C.— Senators John D. (Jay) Rockefeller IV (D-W.Va.), Chairman of the Senate Committee on Commerce, Science, and Transportation; Dianne Feinstein (D-Calif.), Chairman of the Senate Select Intelligence Committee; Mark Pryor (D-Ark.), Chairman of the Commerce Subcommittee on Communications, Technology, and the Internet; and Bill Nelson (D-Fla.), Chairman of the Commerce Subcommittee on Science and Space, today introduced legislation that would – for the first time – provide a federal standard for companies to safeguard consumers’ personal information throughout their systems and to quickly notify consumers if those systems are breached. The bill, similar to legislation introduced in the 111^th and 112^th Congresses, addresses security vulnerabilities that were exploited by criminals in the recent massive data breaches of major U.S. retailers. Those breaches left tens of millions of Americans vulnerable to identity theft and credit fraud.

The Data Security and Breach Notification Act would require the Federal Trade Commission (FTC) to issue security standards for companies that hold consumers’ personal and financial information. In the event of a data breach, companies would be obligated to notify their affected customers so they can take steps to protect themselves from the risk of identity theft and fraud.

“Companies constantly collect personal information about their customers, like credit card information, financial account numbers and passwords. In return, I believe those companies should be responsible for securing this personal information throughout their systems that store this sensitive data,” Rockefeller said. “The recent string of massive data breaches proves companies need to do more to protect their customers. They should be fighting back against hackers who will do whatever it takes to exploit troves of consumer information. Our bill gives consumers the peace of mind that companies are doing everything they can to protect and secure their personal information from criminals.”

Rockefeller noted this week during the Senate Select Intelligence Committee hearing on open threats that he has serious concerns about the President’s recent proposal to move the National Security Agency’s (NSA) 215 metadata collection program to private telecommunications companies. He noted that private companies report to shareholders, not the American public, and recent data breaches only heighten his skepticism that private companies would be capable of protecting privacy and strengthening the security of personal information.

“Target’s recent loss of 110 million American consumers’ personal information to hackers does not reassure me that moving this sensitive data to the private sector for intelligence purposes would adequately protect consumers’ privacy. Moving this data away from the stringent audits and oversight mechanisms [included in the 215 telephony metadata program] that this committee has worked to put in place makes the data more, not less, vulnerable to abuse,” Rockefeller said during this week’s Intelligence Committee hearing.

“Recent massive data breaches at Target and Neiman Marcus have put the personal information of tens of millions of Americans at risk,” Feinstein said. “This is a real and growing problem. The legislation I introduce today with Chairman Rockefeller will ensure that Americans’ sensitive personal and financial information is stored securely, that Americans receive prompt notification when this information is compromised and that law enforcement is promptly notified in order to prosecute cybercrime. For more than a decade, I have worked to pass data breach legislation. The breaches are getting more frequent, and members of Congress—of both parties and across different congressional committees—must come together to pass this common-sense plan to protect the American consumer.”

“From Target to Neiman Marcus, we’ve seen far too many data breaches leave our families wondering whether their financial and personal information is secure,” Pryor said. “If companies are going to collect and store consumers’ personal information, safeguarding that data should be their number one priority. By implementing more stringent standards and requiring businesses who are breached to notify those affected, our common-sense bill will help prevent these incidents in the future and give American consumers assurance that their information is protected.”

The Data Security and Breach Notification Act would: 

• Provide security standards for databases. The FTC would be directed to develop robust but flexible rules that require businesses that possess consumers’ personal information to adopt reasonable security protocols to protect that information from unauthorized access. The FTC would have the flexibility to broaden, through rulemaking, their ability to protect other types of personal information if it furthers the purpose of the law and does not unnecessarily burden business. 

• Establish strong breach notification requirements. These requirements would allow all potentially affected consumers to take steps to protect themselves from identity theft and other crimes.

• Increase the use of technology to combat hackers. Businesses would have incentives to adopt state of the art technologies that would render consumer electronic data unreadable or unusable in the case of a breach.

• Strengthen law enforcement. The bill would establish a two pronged enforcement regime whereby the FTC and state Attorneys General would enforce the law. Breached companies would be required to notify a central, designated federal entity (established by the Department of Homeland Security), which would in-turn notify other relevant law enforcement and government agencies of the breach. The bill would impose civil penalties for violations of the law as well as criminal penalties on corporate personnel that deliberately conceal a data breach.

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